Image: J. Crew

Next up on the list of retailers (potentially) seeking bankruptcy protection? J. Crew. According to a report from CNBC on Thursday, the ailing apparel brand is preparing for a bankruptcy filing that could come as soon as this weekend. The privately-held, New York-headquartered company has operated has operated “under a heavy debt load and sales challenges after falling out of touch with its once-loyal customers,” per CNBC, and now is said to be working to secure $400 million in financing to fund its operations in bankruptcy.

J. Crew, which has long been known for its preppy apparel, has been in talks with lenders for weeks, since it was forced to cancel plans to take its Madewell subsidiary public,” the Wall Street Journal reported on Thursday. The retailer – which revealed in March that it brought in $1.71 billion in sales for its marquee brand in 2019, down 4 percent from the year prior, while sales Madewell increased by 14 percent to $602.4 million – “had planned to use the proceeds of the Madewell IPO to pay down part of its $1.7 billion debt, but the IPO plans were scrapped in March” in light of pushback from creditors and a stock market that was sloping due to the onset of the COVID-19 virus.

J. Crew’s name has been high up on the list of analyst predictions of retailers that are unlikely to survive the spread of the COVID-19 pandemic and the global financial crisis that has come along with it due to an over-reliance on physical retail, as well as mounting debt and limited cash reserves. The brand is among those that were “wandering around aimlessly pre-pandemic,” Mark Cohen, director of retail studies at the Columbia Business School, told CNN, making it one of a growing number of companies that are expected to significantly struggle, as brick-and-mortar stores remain closed across the country (and beyond), hundreds of thousands of employees are let go, consumers are largely opting out of non-essential purchases. 

Meanwhile, Jefferies analyst Randal Konik stated in a note this month that “store-based retail was already struggling [due to] internet consumption trends before the start of the coronavirus, and now will be faced with accelerated demand shifts to the internet.” J. Crew – which is heavily dependent upon its brick-and-mortar retail footprint (it maintains 182 stores of its own and nearly 150 for its Madewell offshoot), and struggling to pay back sizable pools of debt – falls neatly within that camp.

If J. Crew’s bankruptcy comes to be, it will join other said-to-be impending Chapter 11 endeavors by the likes of ailing department stores Neiman Marcus and Lord & Taylor, and will come on the heels of True Religion’s filing – its second to date – which took place earlier this month, with the denim brand telling a bankruptcy court in Delaware that although it wanted to wait out the COVID-19 pandemic, it “simply could not afford to do so.”